Blockbuster posts smaller 1Q loss; revenue declines 8 percent

Blockbuster Inc., the world's largest video rental chain, on Thursday reported a smaller loss for the first quarter as lower expenses helped to offset a decline in revenue.

The Dallas-based company posted a net loss of $4.7 million, or 3 cents per share, narrowing from the year-ago quarter's loss of $57.5 million, or 31 cents per share. Revenue declined 8 percent to $1.43 billion from $1.55 billion on decreased results from lower-margin retail sales.

Stripping out one-time costs and non-operating items, Blockbuster said it would have earned 5 cents per share, up from an adjusted loss of 26 cents per share in the 2005 quarter.

Wall Street expected Blockbuster to report an adjusted profit of 2 cents per share on revenue of $1.47 billion, according to Thomson Financial.

Shares of Blockbuster fell 13 cents, or 2.7 percent, to $4.76 in early trading on the New York Stock Exchange.

"Our first quarter 2006 results reflect the actions we have taken to improve our overall profitability and cash flow," Chairman and Chief Executive John Antioco said in a statement. "For the first time in three years we saw an increase in domestic same-store rental revenues and we believe that our combined in-store and online rental offering will allow us to further increase our market share and outperform the domestic rental industry in 2006."

Blockbuster said it is on track to reduce costs and significantly lower its capital expenditures year-over-year. The company expects to meet its goal of 2 million online subscribers by year-end.